Different look to markets ahead of Sosland Purchasing Seminar
May 31, 2016
At last year’s Sosland Purchasing Seminar, one of the highest-interest sessions was on eggs, which drew an overflow audience to hear Bender-Goodman vice-president Richard Broad share his ideas about how the market would deal with the most severe outbreak of highly pathogenic avian influenza in U.S. history. Mr. Broad was concerned that his presentation would be outdated nearly as soon as it was prepared as the A.I. outbreak was near its peak during the Seminar. But attendees wanted to hear comments from an expert, ask questions and share ideas about how to deal with product shortages and rising prices.
Within a couple of months after last year’s Seminar, egg and most egg product prices soared to record highs amid massive losses of processing-egg type laying hens and resulting shortages of eggs and egg products.
Much has changed in a year. As of late May many egg product prices were at multi-year lows, as were eggs, which also were well below the cost of production, especially for processing-type eggs. Mr. Broad will be back at the 2016 Purchasing Seminar, sharing his ideas about how the market is dealing with the current situation of low prices and seemingly adequate to excess egg supplies.
But eggs aren’t the only market that has seen significant changes from a year ago, which is why about 800 purchasing managers, sales representatives, brokers and others will return to Kansas City June 5-7 for this year’s Purchasing Seminar.
Weather always is a major attraction at the Seminar as it typically is the major influence on markets during the growing season. A year ago the globe was in the throes of one of the most severe El Niño weather patterns in decades. It brought drought to parts of Southeast Asia and India, more mild conditions to North America and much-needed moisture to the U.S. West coast. This year it appears La Niña is fast approaching, with its nearly opposite impact on weather — renewed moisture to Asia and possibly dryer weather to the U.S. Midwest.
Meteorologist Drew Lerner, president of World Weather, Inc., will again deliver the weather outlook at the Sosland Purchasing Seminar, sharing his insights of how this year’s weather will impact crop production around the world.
More than 800 industry executives will gather in Kansas City June 5-7.
One of the results of El Niño was a sharp reduction in sugar production in India, the world’s second-largest producer and largest consumer of sugar, which contributed to the first global sugar deficit in six years and a turnaround in world raw sugar prices.
The domestic sugar market, though mostly insulated from global price and production swings due to the controversial U.S. sugar program, also is undergoing a seemingly fundamental change. A year ago U.S. beet and cane sugar prices in the United States were trending lower from highs seen in the fall of 2014, as the market was adjusting to a new bi-lateral agreement controlling cane sugar imports from Mexico.
This year, demand for cane sugar is growing, and prices recently have firmed as more companies choose to use non-bioengineered cane sugar over beet sugar, which is mostly from bioengineered seed and for which prices have weakened. The U.S. Department of Agriculture earlier in May announced higher raw cane sugar import quotas, among other things, while also predicting record-high beet sugar production. The Sosland Purchasing Seminar will provide expert opinion on where the sugar market may be headed.
Meanwhile, other ingredients such as dairy, cocoa, fruits, nuts and spices all have unique stories as well. Cocoa powder prices have been relatively steady, but cocoa butter prices and cocoa bean futures have seen wide swings in a market that also is expected to be in a deficit supply situation this year amid ongoing weak chocolate demand.
Dairy products, with the exception of butter, continue to hover near multi-year lows amid ample domestic and global milk production. The dairy session at the Purchasing Seminar will provide a detailed outlook on the dairy situation and the ongoing milk supply glut.
There also will be plenty to learn about the major grain markets, with wheat and corn supplies expected to be near record levels, soybean supplies lower than expected and prices for all three higher than many analysts had predicted earlier in the season. Industry experts will share outlook ideas while attendees talk markets and conduct ingredient business on the sidelines.